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Introduction
Safety and reliability of products are an important concern to consumers, sellers & manufacturers. Faulty products can be hazardous for the consumers' health & property. The manufacturer/ seller of faulty could be held liable for such damages, exposing themselves to financial losses.
Product liability insurance protects the companies exposed to above risk by financially assisting policyholders in such situations. (Code: Misc 15)
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Scope of cover
This Policy broadly covers:
Legal liability of the Insured towards damages to the third party arising due to faulty products manufactured / sold by the insured, liability with respect to:
 | Accidental death |
| Bodily injury or disease |
| Loss or damage to property |
Legal costs and expenses incurred with the prior consent of the Insurer and within the limit of indemnity.
| Policy Details
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Sum Insured
Depending on exposure (end users, sales territories, nature of products & turnover), the proposer has to fix two limits of indemnity under the policy:
| Any One Accident (AOA) |
| Any One Year (AOY) |
AOA and AOY can be in ratio of 1:1, 1:2, and 1:3 and maximum can be 1:4. It is not permissible to issue the policy with unlimited liability.
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Premium
Premium chargeable depends on the:
| Risk group (products to be covered) |
| Turnover of products (for proposed period of insurance) |
| Sales territories |
| Limits of indemnity selected |
| Ratio of limits |
| Quality control system & R&D strength of the insured |
| Claims experience |
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Significant Exclusions
This Policy does not cover liability arising out of or in connection with:
| Product efficacy |
| Product recall |
| Product guarantee |
| Pure financial loss |
| Terrorism, war & SRCC |
| Any professional services deficiency |
| Personal injuries such as libel, slander |
| Fines, penalties and punitive or exemplary damages |
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Excess
Policy is subject to compulsory & minimum excess of 0.5% of AOA limit
Discount
Higher excess opted on a voluntary basis qualifies for discount in premium.
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Main Extension
| Limited named vendor's liability |
| North American jurisdiction clause (covering exports to American countries) |
| Technical collaborator's clause |
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